Madagascar is taking a decisive step in its mining policy. A new Large Mining Investment Law (LGIM) is being adopted, raising the eligibility threshold for preferential benefits to $100 million — double the 2005 legislation. The goal: attract massive capital, structure the industry, and create local added value.
A doubled threshold to target mega-projects
The old 2005 law set the threshold for preferential regimes at $50 million. The new LGIM raises this to $100 million, explicitly targeting operators capable of transforming Madagascar's mining landscape. In return, these investors will benefit from significant tax reductions, customs duty exemptions on equipment, and additional deductions for operators integrating local mineral processing units.
The government aims to open 20 major mining projects over five years — a programme that could reposition Madagascar on the continental mining map. The flagship Base Toliara project — ilmenite extraction in the south — illustrates this potential: the announced investment exceeds $1 billion, targeting production capacity of approximately 1 million tonnes annually.
80% Malagasy workforce required
To benefit from LGIM advantages, companies must employ at least 80% Malagasy workers, limiting foreign staff to 20% of the workforce. This local content clause responds to recurring criticism about the limited economic anchoring of large mining operations in local territories. It is accompanied by vocational training requirements to develop national expertise in mining professions.
Civil society demands greater transparency
Several civil society organisations have raised concerns about structural exclusion of Malagasy businesses, whose financial capacity rarely reaches the $100 million threshold. They advocate for mandatory partnership mechanisms between foreign investors and local stakeholders, as well as full publication of mining contracts and generated tax revenues.
The Ministry of Mines has acknowledged these concerns and is discussing a supervised subcontracting framework. The text, submitted to Parliament for adoption, still requires sectoral consultations before promulgation.
Why it matters
Mining is one of Madagascar's primary sources of foreign exchange and a central lever of its development strategy. By doubling the eligibility threshold and imposing a high local content ratio, Antananarivo is seeking to avoid the « boom without benefit » pitfalls that have marked other African economies. Success will depend on the robustness of oversight mechanisms and the state's ability to negotiate balanced contracts with investors commanding considerable legal resources.
Sources: Allafrica.com, 2424.mg, madagascarnewsroom.com — August 2026.